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Activision Executives Must Face Shareholder Claims Over Microsoft Takeover, Judge Rules

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A Delaware judge has ruled that former Activision Blizzard executives, including longtime CEO Bobby Kotick, must face key shareholder claims alleging they sold the company too cheaply in Microsoft’s $75.4 billion acquisition of the “Call of Duty” maker.

Chancellor Kathaleen McCormick of the Delaware Chancery Court said shareholders, led by Sweden’s Sjunde AP-Fonden pension fund, can proceed with their core allegation that Kotick and Activision’s board breached their fiduciary duties by favoring Microsoft for personal gain.

The lawsuit claims Kotick rushed into the deal to secure his job and collect $400 million in change-of-control benefits, while insulating himself from potential liability over allegations of widespread sexual harassment at the company. Plaintiffs also argue that the $95 per share sale price undervalued Activision, especially as its performance improved during the lengthy 21-month regulatory review before the merger closed in October 2023.

McCormick’s 83-page opinion found it “reasonably conceivable” that Activision’s board prioritized Kotick’s interests over shareholders and accepted a lowball offer. However, she dismissed claims that Microsoft aided the alleged misconduct, noting that the company may have “passively stood by.”

“Litigation on the merits of a trimmed-down version of the plaintiff’s complaint can now launch,” McCormick wrote. “Game on.”

Microsoft said it believes the remaining claims will be disproved, insisting the deal was “fairly negotiated and delivered great value to shareholders.”

Judge Rules Activision Executives, Including CEO Bobby Kotick, Must Face Lawsuit Over Microsoft Takeover

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A Delaware judge has ruled that Activision Blizzard executives, including longtime CEO Bobby Kotick, must face most of a shareholder lawsuit accusing them of shortchanging investors during the company’s $75.4 billion sale to Microsoft.

In an 83-page decision issued Thursday, Chancellor Kathaleen McCormick of the Delaware Chancery Court said shareholders could move forward with their “core” claim that Kotick and other board members breached their fiduciary duties by prioritizing personal and managerial interests over those of shareholders.

The case, led by the Swedish pension fund Sjunde AP-Fonden, alleges that Kotick rushed into the deal to secure his position and an estimated $400 million in change-of-control benefits, while shielding himself from potential liability related to sexual harassment scandals at Activision. Shareholders further claim that the $95-per-share price undervalued the company—particularly as Activision’s performance improved during the 21-month regulatory approval process before the merger closed in October 2023.

Judge McCormick’s ruling found sufficient grounds to infer that Kotick “manipulated the sale process to favor Microsoft,” which she described as offering “speed, deal certainty, and—inferably—a friendly landing place.” She also found it “reasonably conceivable” that Activision’s directors placed Kotick’s interests above those of investors, potentially allowing a lowball sale while the company’s reputation and stock price were still weighed down by harassment allegations.

However, McCormick dismissed claims against Microsoft, noting there was no evidence the company actively participated in the alleged breaches, even if it may have “passively stood by.” Other secondary claims against Activision officials were also dismissed.

With the decision, McCormick signaled that “litigation on the merits of a trimmed-down version of the plaintiff’s complaint can now launch,” adding pointedly: “Game on.”

The case, Sjunde AP-Fonden v. Activision Blizzard Inc. et al, continues in the Delaware Chancery Court under docket number 2022-1001, marking another chapter in the post-merger fallout surrounding one of the gaming industry’s largest acquisitions.

Coinbase to Face Narrowed Shareholder Lawsuit After Judge’s Partial Dismissal

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A U.S. federal judge has ruled that Coinbase must face a narrowed shareholder lawsuit alleging it misled investors about key business risks, including the likelihood of being sued by the Securities and Exchange Commission (SEC).

In a 59-page ruling issued Tuesday night, Judge Brian Martinotti of the U.S. District Court in New Jersey rejected Coinbase’s bid for a full dismissal of the case. The lawsuit accuses the cryptocurrency exchange and several of its top executives and board members of fraudulently concealing regulatory and financial risks in public statements over a two-year period.

The shareholders allege Coinbase made misleading claims suggesting it was unlikely to face SEC enforcement, and that customer assets would remain protected even if the company filed for bankruptcy. These statements, made through earnings calls, regulatory filings, blog posts, and social media, allegedly inflated investor confidence.

Judge Martinotti ruled that plaintiffs could not proceed based solely on “group pleading”, where statements in company-wide documents do not specify individual responsibility. However, he allowed the lawsuit to continue for claims where investors provided specific allegations tied to individual defendants, writing, “Where plaintiffs have appropriately provided defendant-by-defendant particularity, the claims must remain.”

In a notable aside, Martinotti criticized the lack of clarity in the plaintiffs’ filings, remarking humorously, “Judges are not like pigs, hunting for truffles buried in briefs.”

Coinbase called the ruling a “significant step forward,” saying it would continue to “vigorously defend against any remaining claims.” Attorneys representing the shareholders did not immediately respond to media requests.

The case stems from major stock drops in 2022 and 2023, including a 26% plunge on May 11, 2022 after Coinbase reported disappointing revenues and added new risk disclosures, and a 12% drop on June 6, 2023 following the SEC lawsuit alleging the company operated as an unregistered securities exchange.

The class action, led by Swedish pension fund Sjunde AP-Fonden, covers investors who bought Coinbase shares between April 14, 2021, and June 5, 2023.

The SEC’s own case against Coinbase was dropped in February 2025, after the Trump administration moved to loosen federal oversight of the cryptocurrency sector, marking a major shift in the U.S. regulatory approach to digital assets.

The case is In re Coinbase Global Inc. Securities Litigation, U.S. District Court, District of New Jersey, No. 22-04915.